Feb 08•5 min read
Stacking DAO: A New Way To Access STX Liquidity
Welcome back, you Stacks hodlers! I hope everyone is enjoying their day and stacking more stacks as we head into this new bull run in Bitcoin and Stacks. Both assets are a must-have if you want to become self-sovereign. Fantastic tools are being built on Stacks to enable your financial freedom. Here are some of the most popular Dapps built on Stacks right now, to name a few:
I am a massive fan of all of them and use them regularly. I wanted to highlight a new entrant into the Stacks ecosystem, one that makes Stacks even more flexible than it is now.
This new Dapp is Stacking DAO, and it promises to unlock a new pool of liquidity for your Stacks token.
The Problem
If you are new to Stacks or have been around Stacks for a while, you are familiar with stacking your Stacks to earn BTC. This is an excellent feature of Stacks as it incentivizes holders to enhance the network's security.
Still, in doing that, you lose the ability to spend your STX for transactions for at least two weeks. While this might not be a big deal for some people, it can be a turn-off for other users because of the opportunity cost of locking up stacks tokens.
This is the problem that Stacking DAO set out to solve, and it has been a resounding success!
The Solution
Imagine if you could lock your Stacks token, receive a representation of your locked Stacks token, and use it as liquidity to put to work to generate more wealth for yourself. Stacking DAO has done just that!
When you use the Stacking DAO dapp, you can lock your Stacks token into their protocol and receive what they call StSTX in return. When you lock your Stacks with Stacking DAO, instead of earning BTC as a reward, you will earn more Stacks tokens, which can go on for as long as you want.
Today, they have 350,050,338.97 STX tokens locked, representing a cumulative value of $35 million! This is a massive feat for a Dapp that came out a few weeks ago. As you can see, there is a huge demand for something like this, and it will continue to grow well into the future as demand for this seems almost infinite. So, what is it like to interact with the Stacking DAO app? Well, let's dive into it, shall we?
Here is what it looks like once you launch the Stacking Dao dapp.
As you can see, it’s super clean and easy to understand, which I think is awesome. I think more people should follow their lead regarding a simplified layout, easy-to-read information, and ease of completing the desired task.
So when you click on the connect wallet button, you will be presented with several popular wallets to choose from to connect with their dapp. Leather, Xverse, and OKX are the most popular and widely used. I LOVE that you can also connect the Asigna multi-sig wallet. I would highly recommend going this route if you have significant assets under your control.
After you log in, you will be presented with this screen:
I started playing around with this app a couple of weeks ago and have put a small amount of STX tokens just to try it out and received stSTX in return. The process is super simple: hit the stack more button and enter the amount of STX you want to lock up, and you are good to go. As you can see, if I keep my STX locked up for the year, I will earn 5.08 STX, which isn’t a bad return. More STX means more stSTX that can be used to generate more wealth. I definitely will be depositing more in the future.
You can unstack and receive your STX anytime after the stacking cycle ends. Here is what it looks like:
When you unstack your STX, you will receive an NFT allowing you to claim your STX after the stacking cycle ends. A stacking cycle is 14 days. But unless you want your STX back, you can keep in locked earning STX all year long while using stSTX to generate yield using other dapps. I also noticed that you can sell your stSTX to Bitflow as well, which is something new. So, if you don’t want to wait 14 days, you can do that as well.
So What Can You Do With StSTX Anyway?
As of right now, you can use it in the Bitflow protocol. You can swap between STX and stSTX on their platform and deposit your stSTX into their liquidity pools to earn fees on swaps.
The use case that will be a huge deal when you can use stSTX as collateral to mint the USDA stablecoin. The ability to do this hasn’t been launched on Arkadiko yet, but it is coming this quarter.
Only two apps are actively using stSTX or plan on using it in the future. Don’t worry; more and more apps are planning on incorporating stSTX.
Overall, stSTX is poised to be an integral part of the Stacks ecosystem as it helps free up liquidity and create a robust digital economy powered by Stacks! The future is bright for stSTX! Start stStacking today! :)
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